Still want to make an IRA contribution for 2020?

The Internal Revenue Service recently announced that individuals have until May 17, 2021 to meet certain deadlines that would normally fall on April 15, such as making Individual Retirement Account (IRA) contributions. This includes both Roth and Traditional IRAs. Roth contributions are after-tax, which means you pay taxes now on your contributions, but all qualified* withdrawals, including earnings, are tax-free. Traditional IRA contributions may be tax deductible and the earnings are tax-deferred while accumulating in the account; however, contributions and earnings are taxable when distributed.

So if you didn’t max out your 2020 IRA contributions, now’s your chance.** (Learn more about contribution limits.)

An IRA is a great way to save for your future by increasing your retirement savings and taking advantage of tax benefits. Member Benefits offers low administrative fees and a fee cap. There are no fees to open or close an account. If you meet eligibility guidelines and live in one of the states that offer our IRA program, you and your family can participate. Find out if your state is eligible.

For more information about saving with an WEA Member Benefits IRA, visit our IRA page or call us at 1-800-279-4030.
 

*For qualified withdrawals from the Roth IRA, the participant must be age 59½ or older and have held the Roth IRA account for at least five tax years.

**Consult your personal advisor or attorney for advice specific to your unique circumstances before taking action.

Now is a good time to check your beneficiaries

Beneficiaries on your retirement account supersede what you have in your will, so it’s good to be in the habit of making sure they’re current as your life circumstances change. You can review beneficiaries when you receive your statement.

Naming beneficiaries for your retirement accounts is an important first step in your estate planning. Without careful consideration, your decision may have unexpected tax and estate planning implications.

There are two basic types of beneficiaries. Primary beneficiaries are entitled to receive any undistributed assets in your account following your death. They share equally in your account unless you specify different percentages. If a beneficiary predeceases you, his or her share of your account is divided proportionately among the surviving beneficiaries.

Contingent beneficiaries are entitled to receive any undistributed assets in your account only if you have no surviving primary beneficiaries at the time of your death. If there are no surviving primary beneficiaries, your contingent beneficiaries share equally in your account unless you specify different percentages.

Consult an attorney or tax advisor if you have questions about your beneficiary designations. And call us at 1-800-279-4030 if you have questions about your retirement account(s).

Time to review 403(b) and IRA contribution limits

The contribution limit for the 403(b) remains unchanged at $19,500 in 2021. The limit on annual contributions to an IRA also stays the same at $6,000. If you’re not maximizing your contributions, you may wish to re-evaluate the amount you’re putting toward retirement. Not only do you lower your taxable income, you ensure that you’re doing everything you can to reach your retirement goals.

Elective 403(b) Contribution Limits

Calendar yearSalary Reduction Contribution Limit15 Years of Service Catch-UpAge 50 and Over Catch-UpPossible maximum
2021$19,500$3,000$6,500$29,000
2020$19,500$3,000$6,500$29,000

For your 403(b) account, some employers only allow changes at the start of the school year and then again in January. Others allow more frequent changes. Both you and your employer will need to sign a salary reduction agreement.

Some districts may allow Roth 403(b) contributions. Your Roth contributions and your pre-tax contributions combined must not exceed the $19,500 limit.

IRA (Roth and Traditional) Contribution Limits

Calendar yearUnder age 50Age 50 or older
2021$6,000$7,000
2020$6,000$7,000

You may contribute to both a Roth and Traditional IRA, but your combined contributions must not exceed the annual limits.

If you make automatic IRA contributions using SmartPlan or through payroll deduction (available in districts offering Trust Advantage™), your contributions do not adjust automatically to meet the new limits. To make adjustments, call 1-800-279-4030 or print out an IRA Contribution Form.

If maxing out contributions is not realistic for you right now, remember: With compound interest, even a small amount invested today can grow to a large sum by retirement.

NOTE: Because the maximum Roth IRA contribution may be reduced depending on MAGI (Modified Adjusted Gross Income), some high-income taxpayers may not be able to make Roth IRA contributions; however, they could make Traditional IRA contributions.

Important year-end information

Year-end deadlines and reminder

December 2020

403(b) and IRA exchanges/transfers/rollovers
Exchanges, transfers, and rollovers require significant processing time. Your completed paperwork (including approved third-party administrator transaction authorization, if applicable) will be submitted to the payer company by the end of December if we receive it by December 11. This includes requests for IRA conversions. Call us if you have any questions. We’re happy to help you through the process.

Postdated checks
We are unable to accept IRA contribution checks written and received this tax year (2020) for next tax year (2021). Postdated checks will be returned.

Year-end withdrawal deadlines
If you would like to take a lump sum withdrawal from your 403(b) or IRA accounts before the end of 2020, your completed request (including third-party administration transaction authorization, if applicable) must be received by us on or before December 18. Requests received after this date may not be processed before year end.

Watch your contribution limits…year end is closing in
Employee contribution limits for 403(b) accounts are $19,500 for 2020; however, employees age 50 and older can contribute an additional $6,500 for a total of $26,000 per year. Give us a call if you need assistance. Learn more at weabenefits.com/limits.

Check your to-do list

Visit yourMONEY online to review your account or call us at 1-800-279-4030.

Important retirement account information

January 2021

Bank change for 403(b) and IRA accounts
A 403(b) and IRA program bank change is effective January 8, 2021. Please note:

Plan ahead for early January 
Retirement account withdrawals cannot be processed between January 1 – 9, 2021, due to a system upgrade in yourMONEY.

Saving for the future is a family affair

Does your teen have a job? Do you have a family member who works on the side? How about family who live outside of Wisconsin and want to build up their retirement nest egg? Great news—you can help them out!

If your teen has earned income, it’s never too early to get them started on their retirement savings with a WEA Member Benefits IRA. A Roth IRA is a particularly attractive savings option for young people who can count on years of tax-free earnings.

If you, your spouse, or child work or own a small business, a Simplified Employee Pension (SEP) IRA might be an option for you or your family member. A SEP provides retirement benefits for small business owners and their employees with little to no administrative costs. There are contribution limits—call us discuss your options.

A Spousal IRA can provide retirement savings for a non-working spouse with no or very little income as long as the married couple files a joint income tax return and has eligible compensation to cover the contribution amount.

And if you have family who live in one of the states that offer our IRA program, and they meet eligibility guidelines, they may also enjoy the benefits of saving with a WEA Member Benefits IRA. Visit our IRA eligibility web page to see which states are eligible.

1-800-279-4030
weabenefits.com/ira

Restrictions may apply. Certain state residency required.

Parnassus Core Equity Fund

What is it?

The Parnassus Core Equity fund is a large-cap blend fund with an objective to provide capital appreciation and income by investing principally in equity securities of larger capitalization companies.

How does it work?

This fund is an actively managed portfolio using different strategies, including:

Dividends. At least 75% of the fund’s total assets will normally be invested in equity securities that pay interest and dividends. The remaining 25% may be invested in non-dividend-paying securities.

Environmental Social Governance (ESG). The Parnassus Core Equity fund seeks to invest in companies with positive performance on ESG criteria. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Defensive nature. The portfolio managers focus on high-quality companies that may perform better than the market during downturns.

Risk

All investments involve risk and investing in the Parnassus Core Equity Fund is no exception. You could lose money investing in the Fund. The likelihood of loss may be greater if you invest for a shorter period of time. The Fund is intended for investors who can accept that there will be fluctuations in value.

Trend

The number of funds that incorporate Environmental, Social, and Governance factors as a subset of nonfinancial performance indicators is on the rise. This is in response to many investors’ desire to invest in a way that aligns with their values.


This is not an offer. Securities can be offered by the prospectus only. The Parnassus Core Equity Fund is not suitable for all investors and the prospectus should be read carefully by an investor before investing. Investors are advised to consider the investment objectives, risks, charges, and expenses carefully before investing. This prospectus, which is available at SEC.gov and weabenefits.com/investments, and may be obtained by calling 1-800-279-4030, contains this and other information about the fund. Securities offered through WEA Investment Services, Inc. Member FINRA.

Get the facts about Member Benefits’ retirement and savings program

MYTH: You have to move your money out of WEA Member Benefits because (fill in the blank).

FACT:

Despite what you might hear, you DO NOT need to move your money from your 403(b) or IRA with Member Benefits if you:

MYTH: Consolidating your money will make it easier for your beneficiaries.

FACT:

Sure, consolidation makes managing your money easier, but unless you are consolidating into a low-cost program, your account balance could take a hit.
You won’t have access to your 403(b) funds in retirement because it is in an “annuity” (tax-sheltered annuity).

Our program has flexible withdrawal options without surrender periods (the amount of time an investor must wait before withdrawing funds from an annuity without penalty). Often individual annuities or insurance company annuities have surrender/maturity periods that are many years long (sometimes 5–12 years). Ours doesn’t.

MYTH: My beneficiaries are specified in my will, so I’m set.

FACT:

Your will is not enough. The beneficiary designated on any retirement account supersedes the instructions found in a will or a trust. So be sure yours are up to date on all of your retirement accounts, and review and update your accounts whenever you experience any major life events (marriage, divorce, birth of a child, death of a family member, etc.).

MYTH: There are fees to transfer money from other retirement accounts into Member Benefits program.

FACT:

Nope! The WEA TSA Trust does not charge fees to transfer money from other retirement accounts into our program. However, if your retirement account at your current carrier has a surrender fee, or if you move money from a mutual fund that has a redemption sales charge, you may be charged a fee from your current carrier. Contact your current provider to review possible charges.

MYTH: There are fees to get funds out of your Member Benefits account upon retirement.

FACT:

Nope again! Member Benefits does not charge transactional fees or surrender charges even if you move your money out. (Mutual fund redemption fees may apply in certain situations.)

MYTH: Member Benefits doesn’t offer nonretirement accounts.

FACT:

Yes, we do! We have been offering Personal Investment Accounts since 2018. It’s a way to invest your money outside of a retirement account without using a cash account such as savings, checking, or certificates of deposit. It can be registered in just your name or opened jointly with anyone.

MYTH: In order to open a WEA Member Benefits IRA, I have to live in Wisconsin.

FACT:

In case you missed it, Member Benefits recently opened our IRA program to folks who live outside of Wisconsin! If you meet eligibility guidelines and live in one of the states that offer our IRA program, you and your family may enjoy the benefits of saving with a WEA Member Benefits IRA.

Have some questions about your retirement account or need help getting started? Contact us at 1-800-279-4030 or retirement@weabenefits.com.

Know your retirement contribution limits

However, if you’re not maxing out your retirement contributions, it’s a great reminder to contribute as much as you can right now to ensure you won’t have regrets about how much money you saved for retirement later.

The 2021 limit for the 403(b) is $19,500 and the age 50 and over catch-up is $6,500. For the IRA, the limit is $6,000 with the age 50 and over catch-up an additional $1,000. Get more details at weabenefits.com/limits.

You will need to contact your employer to increase your 403(b) contribution. Some employers only allow changes at the start of the school year and then again in January. Others allow more frequent changes. Both you and your employer will need to sign a salary reduction agreement.

Take some time to review your account and see if you can give yourself a raise! Call us at 1-800-279-4030 if you need assistance or have questions.

National Retirement Security Week 2020

“According to the 2019 EBRI/Greenwald Retirement Confidence Survey, two-thirds of American workers say they are confident they will have enough money to retire comfortably.”

Yet more than 22 percent of Americans have less than $5,000 saved for the future, and another 15 percent have nothing at all saved. (Northwestern Mutual 2019 Planning & Progress Study)

Those between the ages of 55 and 64 who have retirement savings only have a median of $120,000 saved.

56 percent of Americans don’t know how much money they’ll need to save to retire comfortably. (Northwestern Mutual).

What gives?

Not only are Americans seemingly unprepared for retirement, most don’t even know it. Social Security’s future is uncertain, private sector pension plans are disappearing, life spans are increasing, and health care costs are rising. Working longer and living on less will be a harsh reality for many.

The good news

As a public school employee, your employer contributes to the Wisconsin Retirement System on your behalf, covering a portion of your retirement needs. But that’s not all.

As a public school employee, you are eligible to open a 403(b) retirement savings account. A 403(b) is a great opportunity to build additional savings with before- and/or after-tax contributions conveniently deducted from your paycheck. A 403(b) can help you achieve your retirement dreams, regardless of your age.

Early career

Start today. The longer your time horizon before retirement, the longer your money can work for you. You can start a 403(b) with as little as $20 per pay period. When selecting a provider, compare fees. Even one percentage point can make a big difference in your account balance at retirement.

Mid-career

Take time to calculate your retirement income needs. Our retirement planning calculators can help you approximate how much you need to save, determine the impact of changing your retirement savings payroll deductions, ascertain projected shortfall or surplus at retirement, and more.

Work toward contributing the maximum allowed. Include after-tax (Roth) contributions, if available in your district, to your 403(b) account to help reduce your tax liability in retirement. Please check with your employer for the availability of after-tax contributions.

Member Benefits’ 403(b) program

Most public school employees in Wisconsin have access to Member Benefits’ 403(b)—a program recognized nationally by Forbes and the LA Times for its sound management and low fees. Call one of our consultants at 1-800-279-4030 for more information.

Q&A on the PIMCO All Asset Fund

What is it?

The PIMCO All Asset fund (Prospectus / Fact Sheet) is known as a “fund of funds” because it has several different kinds of funds with different strategies. Each fund holds different types of investments such as bonds, TIPS (Treasury Inflation Protection Securities), commodities, real estate, emerging-markets debt, equities, and alternative assets. Because of the broad inclusion of investments, it is considered an “All Asset” fund.

How does it work?

The PIMCO All Asset fund is an actively managed portfolio. The fund manager goes in and out of the various underlying PIMCO funds using a tactical asset allocation strategy seeking to create appreciation and income by buying and selling different funds across different assets. The fund does have a prebuilt allocation, but if the fund manager believes there is an opportunity in a particular investment, they will shift the portfolio to try and capture the opportunity. Once the opportunity has been captured or is no longer an opportunity, they will revert to the original preset allocation.

Risk

Due to the broad nature of the investments in the fund and its global reach, the fund does carry several risks including currency risk, distressed investments, interest rate risk, leverage, sovereign debt, potential loss of principal, and market volatility. The fund manager also has broad discretion over the allocation of the fund, which can cause the level of risk to fluctuate. For example, if the fund goes from 60% bonds and 40% stocks (a generally conservative stance) to 20% bonds and 80% international stock, the level of risk has increased.

Benefit

The benefit of this fund is that it gives investors access to a broad range of different investment assets with the potential of capturing short-term gains in various opportunities in the market. However, the level of risk in this fund can change because assets are moved to capture short-term gains.

In a portfolio

The PIMCO All Asset fund can be a good hedge against inflation as it tries to capture short-term gains by moving assets through various investments and strategies. It also holds treasury inflation protections as a part of its general allocation to protect assets against inflation. However, keep in mind the fund’s risk and investment strategy can shift frequently.

This is not an offer. Securities can be offered by the prospectus only. The PIMCO All Asset fund is not suitable for all investors and the prospectus should be read carefully by an investor before investing. Investors are advised to consider the investment objectives, risks, charges and expenses carefully before investing. This prospectus, which is available at SEC.gov and weabenefits.com/investments, and may be obtained by calling 1-800-279-4030, contains this and other information about the fund. Securities offered through WEA Investment Services, Inc. Member FINRA.